co-op bank unfair charges

simmy1

my daughter has used her debit card in a shop and it has taken her £3 overdrawn. The co-op (ethical!!!) bank has slapped on the £20 charge as she doesnt have an overdraft. She asked for an account that would not let her go overdrawn and was treated to a patronising talk(with a diagram no less) on how sometimes transactions of this nature dont show up immediatly on the account. I had read about the cash minder account on the moneysaving website so she asked for this but she was told you can still go overdrawn with that account and anyway it would give her a bad credit rating if she took this on.
she is on a low wage and trying hard not to get into debt but the co-op bank seem to want to screw her and those like her for every penny they can get without giving any options.

Anyone else got experience of the co-op acting in this manner and are they righgt about the cash minder account.

smartiedriver_2

Partonising or not, perhaps if she had fully listened and understood that explanation she wouldn't have made a transaction for which she did not have sufficient cleared funds?!

I don't know anything about the account itself, but most current accounts will enable you to go overdrawn unless it's a basic bank account or she has a NIL limit marked (for adverse credit purposes). Get her registered for internet banking so she can check her balance before she goes out.

podperson

If it's the first time she's had a charge then if she calls the bank up they will often refund as a goodwill gesture.

simmy1

I think you make a good point smartiedriver, perhaps if the banks took time initially when young people open their first account to explain how these charges can be incurred then they could be avoided.
How hard would it be for them to offer a free £5 to £10 buffer zone for new young account holders whilst they get used to managing their own money.
My daughter had money in her account when she used her card in a store but yes if she had checked her balance first then she perhaps could have avoided going overdrawn however i hardly think she acted particularly irresponsibly. Going a couple of pounds overdrawn when you are starting out should not be rewarded by enormous bank charges.
I would have more respect for the bank if they had allowed her a small buffer on this occasion, explained how charges can be incurred and warned her that any future incidents would be charged.
But instead she will have to go through the process of complaining in order to get the charges wiped.

Common_Sense_2

simmy1 wrote: »

I think you make a good point smartiedriver, perhaps if the banks took time initially when young people open their first account to explain how these charges can be incurred then they could be avoided.

If you read the terms and conditions of the account you will find a section (probablly) headed "unauthorisied overdraft fees" This would surely explain this to any young / old person.

simmy1 wrote: »

I would have more respect for the bank if they had allowed her a small buffer on this occasion, explained how charges can be incurred and warned her that any future incidents would be charged.

What you are asking for is the banks to spoonfeed people with information that a little common sense should cover. For example if someone spends more money than they have in the bank, then surely they should realise that they are borrowing money from the bank, and quite rightly they should pay for that privilege of borrowing without asking.

problem is, common sense isn't all that common nowadays anymore as we all prefer to blame someone for not telling us simple things!

simmy1

Hi,
thanks for your replies but i think some of you have missed the point. The banks would hardly be paying back thousands to customers in unfair bank charges if they were acting in a fair and responsible manner. This forum is full of instances where banks such as the co-op are clawing in money from those who can least afford it. Nobody wants to be spoon fed but they do want to be treated in a fair manner .

Premier_2

simmy1 wrote: »

Hi,
thanks for your replies but i think some of you have missed the point. The banks would hardly be paying back thousands to customers in unfair bank charges if they were acting in a fair and responsible manner. This forum is full of instances where banks such as the co-op are clawing in money from those who can least afford it. Nobody wants to be spoon fed but they do want to be treated in a fair manner .

They're not

pinkerton_angel

simmy,
I can completely see what you're saying - I bank with co-op and a few years ago they did some horrendous things to my account, I'm not saying I was completely blameless as wasn't so great at managing my money back then but still, what they did was shocking and in no way fair, their charges were extortionate and when you asked for help they didn't want to know and then slapped more and more charges on.
That said on one occasion they did give me a refund of charges so it's worth giving them a call to ask them.

malc_b

I thought the OFT had ruled on this and set a £12 limit? Basically you cannot fine someone for going overdrawn. Only courts can impose fines (although what the banks do feels like a fine). Banks can charge you interest and charge you for sending a letter. I thought that OFT has set a £12 limit of the cost of letter, hence credit cards and banks can charge no more than that. I'd check this as £12 is better than £20 and if co-op are breaking the rules then may be they'll withdraw it all if they think you'll shop them :-).

Update: All I can find is: "In April 2006, of the Office of Fair Trading raised this issue saying that Credit Card companies should apply charges of £12 maximum per violation". I don't see why Banks are any different so £20 is OTT. I say challenge this and threaten to take it up with the ombudsman. The co-op has to show that it COSTS them £20 to send this letter when OFT say £12 or less is more realistic.

Azrael_1701

malc_b wrote: »

I thought the OFT had ruled on this and set a £12 limit? Basically you cannot fine someone for going overdrawn. Only courts can impose fines (although what the banks do feels like a fine). Banks can charge you interest and charge you for sending a letter. I thought that OFT has set a £12 limit of the cost of letter, hence credit cards and banks can charge no more than that. I'd check this as £12 is better than £20 and if co-op are breaking the rules then may be they'll withdraw it all if they think you'll shop them :-).

Update: All I can find is: "In April 2006, of the Office of Fair Trading raised this issue saying that Credit Card companies should apply charges of £12 maximum per violation". I don't see why Banks are any different so £20 is OTT. I say challenge this and threaten to take it up with the ombudsman. The co-op has to show that it COSTS them £20 to send this letter when OFT say £12 or less is more realistic.

This ONLY applies to credit card overlimit/late payment charges, there is no such limit on bank charges.